Noble Roman's Announces Continued Growth and Expanded Profitability for 2014

Company Continues to Focus on Delivering Profitable Growth in All Three Venues

INDIANAPOLIS, IN--(Marketwired - Mar 12, 2015) - Noble Roman's, Inc. (OTCQB: NROM), the Indianapolis based franchisor and licensor of Noble Roman's Pizza and Tuscano's Italian Style Subs, today announced results for the year 2014 and the quarterly period ended December 31, 2014.

In addition to expanded profitability, two significant highlights from 2014 are very important, and should positively impact 2015. First, extensive ground work was laid to expand the company's footprint in grocery stores by adding larger distributors and larger grocery store chains and to improve the company's grocery store take-n-bake offering. Second, significant research, development and testing occurred within the company's stand-alone take-n-bake venue, which is showing significant promise in test units, that have adapted the changes, and the company is now expanding these changes to other locations.

Financial Highlights for the Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Net income from continuing operations before taxes was $2.85 million, or $0.14 per basic share, compared to $1.44 million, or $0.07 per basic share. The company will pay no income taxes on approximately the next $22 million in net income.

Loss on discontinued operations in 2014 was reduced to $154,000 compared to $780,000 in 2013 as matters related to the discontinued operations have largely been resolved.

Net income was $1.59 million, or $0.08 per basic share, compared to $91,000, or $0.01 per basic share. In 2013, the Company recorded an adjustment for valuation of receivables in the Heyser case with an after tax effect of $731,000 without which the net income would have been $822,000, or $0.04 per basic share.

Operating margin was 38.4% of revenue compared to 37.9%.

Total revenue was $7.92 million compared to $7.53 million, or an increase of 5.2%.

Upfront franchisee fees and commissions were $392,000 compared to $883,000.

Royalties and fees less upfront fees were $7.09 million compared to $6.20 million, or an increase of 14.3%.

Royalties and fees from non-traditional franchises other than grocery stores were $4.49 million compared to $4.27 million, or an increase of 5.0%.

Royalties and fees from grocery store take-n-bake locations were $1.47 million compared to $1.30 million, or an increase of 13.0%.

Royalties and fees from stand-alone take-n-bake locations were $849,000 compared to $310,000, or an increase of 173.5%.

Royalties and fees from traditional locations were $283,000 compared to $313,000.

Net income before taxes from continuing operations was $501,000, or $0.03 per basic share, compared to a net loss of $712,000. The company will pay no income taxes on approximately the next $22 million in net income.

Net income was $149,000, or $0.01 per share, compared to a net loss of $1.2 million.

Total revenue was $1.81 million compared to $1.72 million, or an increase of 5.3%.

Upfront franchisee fees and commissions were $74,000 compared to $147,000.

Royalties and fees less upfront fees were $1.63 million compared to $1.48 million, or an increase of 10.7%.

Royalties and fees from non-traditional franchises other than grocery stores were $993,000 compared to $1.00 million, or a decrease of 0.7%.

Royalties and fees from grocery store take-n-bake locations were $340,000 compared to $257,000, or an increase of 32.2%.

Royalties and fees from stand-alone take-n-bake locations were $234,000 compared to $146,000, or an increase of 60.5%.

Royalties and fees from traditional locations were $67,000 compared to $74,000.

Operating margin was 30.4% compared to 31.9%.

The company continues to focus on growth in its three primary venues, which are non-traditional franchises/licenses other than grocery stores, the sale of take-n-bake pizzas through grocery deli departments and stand-alone take-n-bake franchised locations. The company anticipates continued growth in all three venues in future years while maintaining stable operating costs, as has been the company's history for the past several years.

"In 2014, we delivered top-line growth, as well as an increase in operating margin and earnings per share, all while we deployed initiatives designed to increase our number of locations, further improve our product offerings and maintain a steady level of operating expense. We are currently in the process of stocking six new grocery distribution centers, four of which are with very large distribution chains. In addition, we are in ongoing discussions with a number of larger grocery store chains to add our license take-n-bake to several thousand more grocery stores," said Scott Mobley, President and Chief Executive Officer of Noble Roman's, Inc. Mr. Mobley also added, "The interest shown by the larger distribution chains and by larger grocery chains is expected to result in significant growth in this venue for 2015."

The company's grocery store take-n-bake pizzas are now displayed in bakeable, treated aluminum pans with a clear plastic top. Consumers bake the pizzas in these pans with the anodized treatment on the bottom of the pan which is designed to increase home baking performance by drawing in more heat to make the pizzas crispy on the bottom but soft in the middle. The clear plastic top allows the entire pizza to be visible and appealing. The new products include a gluten-free crust designed to appeal to a growing segment of the population and three varieties of 14-inch mega-topped pizzas, designed for tremendous value appeal, which are called "Mile-High Extra Meat Pizza," "Extra Cheese Four Cheese Pizza" and "Double-Topped Pepperoni Pizza."

Mr. Mobley added, "Our stand-alone take-n-bake development is still relatively new and we are always testing further enhancements to continually improve sales, reduce costs and make the operation even more appealing. Current tests are proving to be extremely positive so far, and we are currently implementing those enhancements into some additional locations."

Balance Sheet Summary

Current assets totaled $4.4 million and current liabilities totaled $2.1 million as of December 31, 2014 compared to total current assets of $3.5 million and current liabilities of $2.0 million as of December 31, 2013. Total bank debt was $3.3 million as of December 31, 2014 compared to $3.9 million as of December 31, 2013. Total stockholders' equity as of December 31, 2014 was $13.8 million compared to $11.7 million as of December 31, 2013.

Conference Call - Management will conduct a live teleconference to discuss its financial results Thursday, March 12, 2015 at 4:30 p.m. ET. Anyone interested should call 1-877-407-0778 if calling within the United States or 1-201-689-8565 if calling internationally. A replay will be available until April 12, 2015 by dialing 1-877-660-6853 if calling within the United States or 1-201-612-7415 if calling internationally and referencing replay pin number 13603404. In addition, the call will be webcast and will be available on the company's website at www.nobleromans.com.

The statements contained in this press release concerning the company's future revenues, profitability, financial resources, market demand and product development are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the company that are based on the beliefs of the management of the company, as well as assumptions and estimates made by and information currently available to the company's management. The company's actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the company's operations and business environment, including, but not limited to, competitive factors and pricing pressures, non-renewal of franchise agreements, shifts in market demand, the success of new franchise programs with limited operating history including the stand-alone take-n-bake locations, general economic conditions, changes in purchases of or demand for the company's products, licenses or franchises, the success or failure of individual franchisees and licensees, changes in prices or supplies of food ingredients and labor, and dependence on continued involvement of current management. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may differ materially from those described herein as anticipated, believed, estimated, expected or intended. The company undertakes no obligations to update the information in this press release for subsequent events.

Consolidated Balance Sheets

Noble Roman's, Inc. and Subsidiaries

December 31,

Assets

2013

2014

Current assets:

Cash

$

157,787

$

200,349

Accounts receivable - net

1,268,788

1,687,954

Inventories

337,822

381,400

Prepaid expenses

472,065

467,721

Deferred tax asset - current portion

1,250,000

1,675,000

Total current assets

3,486,462

4,412,424

Property and equipment:

Equipment

1,361,205

1,383,380

Leasehold improvements

88,718

88,718

1,449,923

1,472,098

Less accumulated depreciation and amortization

962,502

1,041,951

Net property and equipment

487,421

430,147

Deferred tax asset (net of current portion)

9,332,024

7,899,497

Other assets including long-term portion of accounts receivable - net

3,067,754

5,015,931

Total assets

$

16,373,661

$

17,757,999

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term notes payable to bank

$

1,216,250

$

1,469,028

Accounts payable and accrued expenses

818,803

676,386

Total current liabilities

2,035,053

2,145,414

Long-term obligations:

Notes payable to bank (net of current portion)

2,635,208

1,846,736

Total long-term liabilities

2,635,208

1,846,736

Stockholders' equity:

Common stock - no par value (25,000,000 shares authorized, 19,585,089 issued and outstanding as of December 31, 2013 and 20,095,087 as of December 31, 2014)

23,498,401

23,970,654

Accumulated deficit

(11,795,001

)

(10,204,805

)

Total stockholders' equity

11,703,400

13,765,849

Total liabilities and stockholders' equity

$

16,373,661

$

17,757,999

Consolidated Statements of Operations

Noble Roman's, Inc. and Subsidiaries

Year Ended December 31,

2012

2013

2014

Royalties and fees

$

6,823,811

$

7,082,548

$

7,479,334

Administrative fees and other

19,872

24,138

72,541

Restaurant revenue

456,449

420,753

363,340

Total revenue

7,300,132

7,527,439

7,915,215

Operating expenses:

Salaries and wages

979,447

1,056,790

1,063,076

Trade show expense

498,951

514,570

541,385

Travel expense

183,316

207,572

235,127

Other operating expenses

685,836

747,914

876,162

Restaurant expenses

427,127

390,507

402,281

Depreciation and amortization

116,287

113,607

111,750

General and administrative

1,593,646

1,646,993

1,646,502

Total expenses

4,484,610

4,677,953

4,876,283

Operating income

2,815,522

2,849,486

3,038,932

Interest and other expense

413,334

201,381

190,382

Adjust valuation of receivables - Heyser case

500,000

1,208,162

-

Income before income taxes from continuing operations

1,902,188

1,439,943

2,848,550

Income tax expense

753,457

568,406

1,104,809

Net income from continuing operations

1,148,731

871,537

1,743,741

Loss from discontinued operations net of tax benefit of $344,079 for 2012, $511,893 for 2013 and $97,284 for 2014